On-premise vs SaaS: Which one to choose?

On premise has become very familiar to many businesses. This is considered one of the technology solutions that help companies optimize their business. So what is On-premise and what are the advantages and disadvantages of this software, what is the difference with SaaS? Let's find out more in the Viindoo article below.

What is On-premise?

On-premise is archiving software that helps companies store data on-site. On-premise is built on the server system along with the company's operating system. With this software, each business can impact and maintain data in other physical servers.


On-premise software helps businesses store data on-site

Advantages and disadvantages of On-premise

Businesses can use the software by purchasing or renting as a licensee. So What are the advantages and disadvantages of On-premise? Let's see the details with Viindoo below.​

  • Low long-term costs: When owning On-premise, businesses only need to pay the cost of an ownership once. At the same time, the annual maintenance cost of the software is also quite low.
  • Strict privacy policies: On-premise helps businesses to secure data quite well and is not affected by 3rd parties.
  • Full access: The user can have full access to and monitor the resource
  • Independence: Businesses can easily access On-premises without having to have an Internet connection, ensuring that the work schedule is not affected.
  • Expensive investment costs: The costs to invest in space, servers, and related equipment are quite high.
  • Remote access difficult: Because this is on-premise software, remote management, and data access require the company to build a rather complicated setup.
  • The team must be professional: Every company requires professional staff to check and monitor data and security.
  • Costs incurred: On-premise may incur additional costs during operation such as adjustment costs, and update costs to help the software work most stably.

On-premises long-term costs are quite low and highly independent

What is SaaS?

SaaS (Software as a Service) is a cloud-based software model that delivers applications to end users through an Internet browser. SaaS Model licenses and distributes subscription-based software and centralizes third-party hosting. The 3rd party will control the installation phase and, customers can access the software through the Internet connection system more easily.​

On-premises vs SaaS

SaaS software as a service

On premise and SaaS: What's the difference?

So what are the differences between SaaS vs On-premise? Here is a valuable summary table for your reference:

Distinguishing Features
The cost is 10-20 times higher than the cost of SaaS.
Fees are paid monthly or annually.
Payment methods
Pay only once to use the entire software.
Monthly or annual payments.
The warranty policy
The software will be warranted for one year and maintained at a cost of 25% - 50% in the following year.
No maintenance costs, all arising will be provided by the supplier.
Deployment costsInclude software manual, installation, and deployment costs. This cost will account for 5%-10% of the total cost.Low cost or possibly none.

Hosting costsRequires investment in a separate Server/Hosting along with at least one engineer to manage the software. This cost is usually quite large.Hosting/Server cost is zero. Businesses only need to access the provider's Web site to use it.
Management costsUsed to invest in software, hardware as well as a team.Included in the software service pack.
Data storageRequires company investment along with the accompanying team.Hosted in the software provider's cloud.

Privacy PolicyThe company is solely responsible for the security system as well as data backup.The provider will serve the customer and support the implementation of data security.
System upgrades

If the company wants to upgrade the software, it has to pay an additional cost.Upgraded on a subscription basis.

On-premise and SaaS: ​What will be the prominent trend in the future

What software will become the trend in the future? On-premise vs SaaS are seen as rivals and have competition. However, in general, SaaS currently has many advantages compared to On-premise. SaaS is becoming more and more powerful because of its flexibility and time and cost savings as well as the ability to easily scale.


SaaS software is predicted to grow explosively in the future

In the future, many experts believe that SaaS will have a huge influence on consumer decisions. In fact, the profits of SaaS manufacturers increase by about 10.3% per year and are expected to continue to increase in the coming years. Besides, more than 64% of small and medium-sized corporations are applying SaaS software.

To better explain this trend, Viindoo would like to analyze the following 5 factors:

Reasonable costs for all businesses

With On-premise, Enterprises need a server system that works 24/7 to ensure the software works smoothly and instantly at all times.

Purchasing a powerful server, and repairing and replacing components within a few years of the server's life consumes a large amount of budget for an SME. Enterprises need to purchase licenses for software - sometimes the license prices are quite expensive, especially for large or privately developed Enterprise Management software.

In addition, the costs for personnel to manage and operate the system are also a constant expense that causes headaches for managers

With SaaS, Enterprises do not need to worry about all of the above costs.

All you need to do is sign up for a monthly, quarterly, or yearly premium subscription and enjoy all the features available under your chosen plan.

Many service providers have decentralized the price of SaaS packages to suit specific needs. It supports businesses to pay wherever they go instead of paying the entire royalty and not taking advantage of the features provided by the software.

Ensuring data safety and security

Operated by a reputable provider, SaaS, as well as SaaS services, are always protected by leading security experts anytime, anywhere. Database security experts focused on solving the problem will help restore traffic extremely quickly, avoiding denial of service (DDoS) attacks and other types of intrusion.

This is extremely important to small and medium Enterprises with low IT budgets and victims of most cyber attacks (according to Verizon, 43% of cyber attacks target this company, and about 34% penetrate the core system, causing great damage to Enterprises).

On-premise vs SaaS

Information and data security

Large enterprises can also be completely assured of the security of SaaS with modern security-signal encryption technologies. Using SaaS also minimizes the risk of being penetrated into the system from the inside, when the internal server systems depend on the operating ability of the IT team.

Even in cases of force majeure such as natural disasters, epidemics, wars, etc. affect where the data is stored, service distributors will provide Enterprises with backups to restore the state before the problem.

This is very difficult to do in the case of Enterprises storing data on a private server, causing great damage when losing important business data.

Flexibility in human resource management

During the COVID-19 pandemic, most businesses require employees to work remotely to ensure social distancing.

This cannot be done if the Enterprise adopts an On premise solution, where employees' devices need to connect through internal networks. SaaS demonstrates its flexibility when employees and managers can work anytime, anywhere, on any device, as well as can connect, share information and monitor progress instead of having to be present at a Full-time company.

The IT team in the Enterprise will also be able to reduce work pressure as well as maintenance costs

System maintenance and support services

If the Enterprise uses an On premise solution, setting up the infrastructure to operate the server will be extremely complicated for the in-house IT team.

  • This problem will not occur with SaaS systems, which already have pre-set environments and software for direct user access.
  • It will only take a few minutes to tens of minutes of initial setup. You can immediately start using the software without having to be a technology expert.
  • The support team will also be ready to listen to requests and guide users to use the system within the existing subscription package.

Regular system maintenance is also a problem that On premise encounters, but it does not appear in SaaS. With SaaS, system maintenance can take place periodically during downtime and hardly affect the day-to-day operations of the Enterprise. System maintenance and support costs are also often included in the monthly service fee.

Expand and grow according to business needs

Each On premise system typically runs some version of the software that has been licensed by a vendor.

When Enterprises need to solve business features in more advanced versions or use newly developed modules, they must continue to buy and install new ones on the server. This work consumes a lot of time and effort and needs to move and reformat old data to be compatible with new software.

Conversely, when Enterprises use the SaaS model, the distributor will regularly update new features for each version. Users can also expand the software at will by subscribing to packages with more features.

In addition, Enterprises can completely contact the vendor to add customized features according to specific needs.


SaaS expend flexibly

In the above article, Viindoo with readers learn about the On-premise as well as the advantages and disadvantages of the software. Hopefully, the above information will help readers understand On premise in the most comprehensive way and make a decision when choosing a platform.

On-premise vs SaaS: Which one to choose?
Bùi Thanh Tùng June 23, 2022